Government to slash HCA funding by £230m
The Homes and Communities Agency has confirmed its funding for existing housing projects is due to be slashed by £230 as part of the sweeping £6.25bn cuts announced yesterday, and a further £610m funding is in doubt.
Today, the HCA announced £230m of immediate cuts to 2010-2011 programmes, including a £50m cut to Kickstart Round 2 funding, £100m off the £2.4bn National Affordable Housing budget, £30m off the Gypsy and Traveller site grant and £50m off the £311m Housing Market Renewal pathfinders schemes.
In addition, the HCA has been forced to place on hold projects for which funds are not yet committed, affecting the National Affordable Housing programme, Kickstart Round 2 and any local authority new-build programmes which have not reached financial close. This amounts to £610m.
The freeze on new commitments will continue until at least the emergency Budget on 22 June.
The project savings are revealed after it was announced yesterday that parent body, the Department for Communities and Local Government, would be cut by £780m in the current financial year.
As part of the cuts, the HCA will be forced to find 10% savings in its running costs, 3% on additional operating costs, and a 2% cash standstill, meaning budgets will not account for inflation.
A spokesperson said: “We have had to place a number of commitments on hold, and will look to manage down the cuts through renegotiating contracts.”
Chief executive Sir Bob Kerslake said: “This represents the HCA’s contribution to Government saving on both programmes and efficiencies, and we will aim to implement these in a way that minimises impact.”
Yesterday, the Treasury has indicated that it will reinvest £170m of the its savings back into the Agency to fund social rented housing.
To see which Kickstart projects are to be put on hold, click here: Kickstart Round 2
To see which Local authority new build projects are to be put on hold, click here: Local authority new build
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